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La Banque Postale Asset Management (LBPAM)

PRI reporting framework 2019

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ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation undertakes scenario analysis and/or modelling and provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe The RI Team has identified 7 long term trends: ageing population, urbanization, climate change, environmental, agriculture, health and nutrition. These trends determine investment decisions for RI Equity Funds. So far, we have performed an in-house climate-related scenario analysis which relies upon figures collected from international agencies or scientific reports.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

This scenario has introduced sector biases in our scoring system and sector allocation. As a consequence, the energy, materials and transport sectors are underweighted in RI equity portfolios. On the contrary, sectors which provide solutions to the aforementioned challenge are overweighted.

SG 13 CC.

13.4 CC. Describe how the organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, the results and any future plans.

Describe

We have conducted an in-house climate-related scenario analysis which relies upon external qualitative data. The purpose of this analysis was understand how climate change and its consequences shall affect our investment universe. This scenario has introduced sector biases in our scoring system and sector allocation. As a consequence, the energy, materials and transport sectors are underweighted in RI equity portfolios. On the contrary, sectors which provide solutions to the aforementioned challenge are overweighted.

13.5 CC. Indicate who uses this analysis.

specify 

          RI analysts

13.6 CC. Indicate whether the organisation has evaluated the impacts of climate-related risk, beyond the investment time-horizon, on the organisations investment strategy.

Please explain the rationale

13.7 CC. Indicate whether a range of climate scenarios is used.

Indicate the climate scenarios the organisation uses.
Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

other description (1) 

          Rapid urbanization, Health, Food and Nutrition

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

The Equity portfolio follows the French label TEEC taxonomy, while the green bond allocation is classified according to an internal taxonomy : green buildings, renewable energy, sustainable transport, environmental and energy solutions, sustainable agriculture, circular economy.

We have a dedicated Equity Environmental Portfolio that is a climate and environmental strategy. In addition we have invested 2.5 BN euros invested in Green Bonds by the end of 2018.

other description 

          Invest in companies offering green solutions

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

other description 

          Green share

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

LBPAM has developed an IT tool which generates automatically the carbon intensity of all its portfolios invested in Equity or Corporate Bonds. This tool generates also the most significant contributors to the carbon intensity in a portfolio, the portfolio Coal exposure and the "green share" exposure (we identify a company as "green" if solutions and services to address climate change represent more than 20% of its turnover).

LBPAM discloses the carbon intensity of its SRI equity portfolios in the monthly report.

Moreover, LBPAM signed the Montreal Carbon Pledge in 2015. As a result, LBPAM publishes  on its website the carbon intensity of all its equity and corporate bonds investments through mutual funds, once a year.

14.5. Additional information [Optional]

SG 14 CC.

14.6 CC. Please provide further details on these key metric(s) used to assess climate related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Carbon footprint (scope 1 and 2) 
          Assess issuers' absolute CO2 emissions
        
          tCO2
        
          External data provider
Portfolio carbon footprint 
          Assess portfolio's absolute CO2 emissions
        
          tCO2
        
          External data provider
Total carbon emissions
Carbon intensity 
          Assess issuers' activity carbon intensity
        
          tCO2/M€ of revenue or
        
          External data provider
In-house calculation
Exposure to carbon-related assets 
          Assess exposure to potential stranded assets
        
          % of revenue from or % of coal in the energy mix
        
          External data provider

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risks management processes for identifying, assessing, and managing climate-related risks.

Please describe

LBPAM has developped an IT tool which calculates the carbon intensity of all equity and corporate bond assets. The tool also allows the identification of the significant contributors to the portfolio's carbon intensity, investees' coal exposure and green share (defined as solutions and services to address climate which generate at least 20% of sales). Data from this tool is accessible to all analysts and PMs, and it is also disseminated throughout all internal IT tools.

14.9 CC. Indicate whether the organisation undertakes active ownership activities to encourage TCFD adoption.

SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

1.3 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

0.1 % of AUM

Brief description and measures of investment

LBPAM offers a thematic fund - LBPAM Responsable Actions Environnement - which focuses on environmental issues.

The initial universe is composed of companies providing solutions to environmental challenges (climate change, resource depletion, etc.), by managing environmental resources, developing clean technologies or improving environmental protection - for at least 20% of their revenues of their EBITDA. These companies belong to one of the following clusters:

  • Green building
  • Circular economy
  • Renewable energy
  • Eco-solutions and services
  • Sustainable transport and mobility
  • Sustainable agriculture and nutrition

An ESG filter is applied to this initial universe to measure the level of risk exposure of and the ability to manage it.

Over the year, total net assets of LBPAM Responsable Actions Environnement increased significantly from 90 million EUR to 177 million EUR. This fund has received two labels for its ESG and Green credentials, the French SRI label and the TEEC label respectively.

Asset class invested

0.08 % of AUM
0.3 % of AUM

Brief description and measures of investment

LBPAM has invested in green bonds issued by SSAs and non-financial corporates whose proceeds are used to finance renewable energies (wind, solar, small hydro, etc.).

Asset class invested

0.3 % of AUM

Brief description and measures of investment

LBPAM has invested in green bonds issued non-financial corporate whose proceeds are used to finance green building projects (green labelling, smart metering, etc.).

Asset class invested

0.1 % of AUM
0.06 % of AUM

Brief description and measures of investment

LBPAM manages 6 portfolios with direct social impact. These funds invest between 5% and 10% of their assets in social enterprises, which currently are France Active Investissement, Habitat & Humanisme (H&H) and a social impact fund managed by an external asset manager. 3 portfolios have received the Finansol Label (French label for "finance solidaire").

- Since 1988, the associative network France Active works for solidarity and employment, particularly for people far from the labour market. France Active assists, on the one hand, social solidarity and entrepreneurs who create or consolidate jobs and on the other hand, people in difficulty who want to start their own business.

- Created in Lyon in 1985, H&H is an organisation for housing and integration of underprivileged people. "Foncière H&H" is a company created by the H&H organization to build, acquire and renovate housing for people in need.

- The "social impact" fund which was created most recently is an employee savings fund and invests 5 to 10% of its assets in a dedicated fund managed by an external asset manager. This external dedicated fund is entirely invested in "social enterprises".

 
          Multi-thematics: environmental and energy solutions, sustainable mobility

Asset class invested

0.51 % of AUM

Brief description and measures of investment

LBPAM has invested in green bonds issued by SSAs whose proceeds are used to finance environmental and energy solutions (energy engineering, environmental audits, etc.) and sustainable mobility (emission-free vehicles, publication transportation, etc.).

15.4. Please attach any supporting information you wish to include. [OPTIONAL]


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